UBS bank shares plunge as rich investors withdraw money

FRANKFURT, Germany – Swiss bank UBS saw its shares slide on Tuesday on news that investors were pulling money out of its division serving wealthy clients — a token of the market turbulence that has shaken the world in the past few months.

The Zurich-based bank, which nevertheless booked higher fourth quarter profits, cited "very low levels of client activity and pronounced risk aversion" as it reported 3.4 billion Swiss francs ($3.3 billion) had flowed out of its wealth management arm, which handles money from rich people outside the U.S. Outflows in emerging markets and Europe outweighed inflows in the Asia Pacific region and Switzerland.

Shares in UBS Group AG were down 7.8 percent at 15.37 Swiss francs in midday trading in Europe.

The share drop came despite a 10 percent rise in net profit in the October-December quarter, to 949 million francs from 858 million francs in the same period a year earlier. The result beat estimates for 867 million francs compiled by financial information provider FactSet.

Markets for everything from stocks to oil have been marked by turmoil over fears that China will not be able to support global growth as before, that emerging markets face troubles with debt and capital outflows and that low oil prices mean weakening demand in the economy.

Net profit was boosted by 715 million francs from the company's annual revaluation of deferred tax assets. It was reduced by 257 million francs from buying back some of the company's debt, and by 441 million francs in restructuring charges.

The bank recorded what CEO Sergio Ermotti called "an excellent year" for all of 2015, as net profit rose 79 percent to 6.2 billion francs, boosted by the performance of the wealth management division.

The bank said management would propose a dividend of 0.85 francs for the year, up from 0.75 francs from 2014.